Here are the key things you need to know before you leave work today (or if you work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
No changes to report today. All rates are here. In case you missed it, here is an assessment of the pressures on mortgage interest rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
Heartland Bank has started the new year with lower term deposit rates. All updated term deposit rates less than 1 year are here, for 1-5 years, they are here.
A TWO YEAR LOW
There were 3,100 new dwellings consented in November, up +4.8% from the same month a year ago, according to figures released by Stats NZ today. Of these, there were 1,402 stand-alone houses, down -4.1% compared with November 2023, and +1,698 multi-unit homes consented, up +14% over the same period. But stepping back from the monthly data noise, it is clear that the sector is operating at the much lower level now.
MORE FILLED JOBS
The latest Statistics NZ figures show filled jobs rose by nearly +6,000 in November - the first monthly rise since March 2024
VALUE UP, AREA DOWN
Non-residential building consent levels in November recorded a second consecutive strong month, driven by public sector activity, with the $883 mln total value of consents, up +15.8% from November 2023. But the building area consented was actually down -10.5%. For the year to November the non-residential consented area was down more than -18%, and that was on top of the -13% fall in the year to November 2023. Expensive schools, hospitals and public transport projects keep the values up, but are relatively small for the cost. Private developers and owner-occupiers are still cautious about significant capital expenditure, with particular softness in the retail space. But at the margins there is still a reasonable amount of work in the industrial/storage segment.
NO JOY FOR RETAILERS
The end of year holiday retail rush didn't make up for the slow start to the month for retailers. Worldline/Paymark data shows a -0.7% dip in December card use at retail outlets, with the retreat led by major centres Auckland and Wellington, both down -2.0%. Not helping was that average transaction values fell as well compared to the same month a year earlier.
GAMING THE RATES OUTLOOK
Floating mortgage rates saw a huge surge in popularity in November, with over $3.5 bln of lending done at floating rates according to new RBNZ figures.
LOAN YIELDS MOVE FOR FLOATING, NOT FOR FIXED
RBNZ data shows that yields on floating rate mortgages fell quite a bit in November, down to 6.52% from 6.81% in October, down -29 bps, down -47 bps from August. Not unexpected of course given the OCR rate cut, although that was -50 bps. Fixed rates actually rose +4 bps on average to 6.33% from August. The yield on all business loans fell -66 bps, to 7.12% from August.
AUSSIE INFLATION PICKS UP
In Australia, the Melbourne Institute's Monthly Inflation Gauge rose by +0.6% in December 2024, sharply accelerating from a +0.2% increase in November and marking the highest level since December 2023. It was also the fourth consecutive month of gain.
JOB ADS RESILIENT
The ANZ-Indeed Australian Job Ads survey rose by +0.3% in December from November, swinging from a revised -1.8% drop in the prior month. The latest level suggests their labour market is still resilient on a short-term basis despite elevated interest rates. On an annual basis however, job ads dropped -12.5% from December 2023. They have dropped almost -28% from their peak in 2022.
SWAP RATES HOLD
Wholesale swap rates are probably little-changed today. Our chart below will record the final positions. The 90 day bank bill rate was unchanged on Friday at 4.12%. The Australian 10 year bond yield is up +17 bps from this morning to 4.70%. The China 10 year bond rate has risen +2 bps to just on 1.64%. The NZ Government 10 year bond rate is up +12 bps at 4.77% while today's RBNZ fix was 4.70% and up +3 bps. The UST 10yr yield is now just on 4.77% and up another +1 bp from this morning. Their 2yr is now just on 4.38%, so that positive curve has raced out to +39 bps. Here is a review of recent sovereign bond rate moves, although today's large local jumps have happened after that article was published.
EQUITIES IN RETREAT
The NZX50 has fallen -0.8% in late still-thin trade today. But the ASX200 is down another heavy -1.4% in afternoon trade. Tokyo has opened its Monday trade down -1.0%. Hong Kong is down -1.5% and Shanghai is down -0.3%. Singapore is down -0.4% at its open. The futures market is signaling that Wall Street will open tomorrow up +0.3% on the S&P500. But that may depend on how the bond market opens there.
OIL JUMPS
The oil price is up +US$1.50 from this morning, now just on US$78/bbl in the US, and now just on US$81/bbl for the international Brent price. That makes this price set its highest since August.
CARBON PRICE SLIPS SLIGHTLY
The carbon price has slipped today by -$1.20 to NZ$62/NZU. See our new daily chart tracker of the NZU price for carbon, courtesy of emsTradepoint.
GOLD MARGINALLY SOFTER
In early Asian trade, gold is down -US$2 from this morning, now at US$2688/oz.
NZD LITTLE-CHANGED
The Kiwi dollar is up +10 bps from this morning, now at 55.7 USc, consolidating at the lower level. Against the Aussie we are unchanged at 90.4 AUc. And against the euro we are up +10 bps at 54.4 euro cents. This all means the TWI-5 is now just on 66.7 and little-changed from where we opened today.
BITCOIN DIPS FURTHER
The bitcoin price has slipped to US$94,221 and down -0.7% from where we opened this morning. Volatility of the past 24 hours has been modes at just under +/- 1.2%.
Daily exchange rates
Select chart tabs
Daily swap rates
Select chart tabs
This soil moisture chart is animated here.
Keep abreast of upcoming events by following our Economic Calendar here ».
52 Comments
Over the ditch, the deeply compromised National Anti-Corruption Commission has completed its first investigations invoicing taxpayers for $140 million. And surprise, surprise - no corruption has been found.
NACC won't say if Angus Taylor's "Watergate" was investigated - despite 2 of 3 cases related to "procurement". For those unaware, this $80 million scandal in 2017 is about the former Coalition Government procuring at vastly inflated water rights from a Cayman Islands company founded by Taylor, who was Energy Minister at the time of the deal.
You couldn't make this stuff up.
https://theklaxon.com.au/nacc-finds-no-corruption-spends-140m-to-date/
The LA fires warrant a 'Marshall Plan' under Gavin Newsom who has announced a sweeping plan to rebuild Los Angeles, dubbing it "L.A. 2.0". Newsom claims he’s already mobilizing city officials, civic influencers, business moguls, and labor unions to execute his vision.
He says that the region will be completely transformed with federal assistance to reshape LA before the Olympics.
Marshall Plan should give a sense of the scale of the disaster. But as someone pointed out to me, this sounds very much like a fantasy from the World Economic Forum. Remember the 15-min City vision that was even being touted for Aotearoa?
https://www.nbcnews.com/meet-the-press/video/gov-newsom-says-he-s-organ…
The US had budget surpluses during the years leading up to and including the early phases of the Marshall Plan. Specifically, the U.S. had budget surpluses each year from 1946 to 1949. For ex, in fiscal year 1947, the federal government recorded a surplus of approximately $4 billion, which was about 1.7% of GDP at that time. This surplus provided a financial cushion that enabled the U.S. to allocate substantial funds toward international aid programs like the Marshall Plan without immediately increasing national debt.
Considering the US is not running surpluses and national debt being out of control, does the Newsom's LA 2.0 make much sense as a Marshall Plan?
We will always have Paris JC
No. Paris is not a "15-min city." It has implemented cycling infrastructure. It benefits people living in the more expensive arrondissements of Paris. The lower down the socio-economic chain, the less it applies. Even in Japan, few people can commute to their workplace in 15 mins. It's the stuff of fantasy.
It's the stuff of fantasy....maybe in your head?
Until just a few years ago, the right riverbank of the Seine in Paris was an urban highway used by over 40,000 vehicles every day. Despite being named a UNESCO World Heritage Site, the road was either heavily gridlocked during rush hour or was a corridor for cars traveling at high speeds. It contributed to the city’s high rates of air pollution, which regularly exceeded EU limits and contributed to thousands of deaths each year in the city.
In 2016, the road was converted into a car-free linear park, used by commuters during the week as well as residents and visitors for leisure activities on the weekends. The move was part of a larger attempt to improve air pollution and livability in the French capital — later referred to as a “15-Minute City” program — which spanned a wide range of public investments across transportation, sustainability and new programs to strengthen neighborhood-level governance.
You have any idea of how expensive it is to live along the Seine? I guess not. But that was always the issue with this nonsense - reality. Amsterdam is a far better example in Europe. Valencia even.
Like I said, urban Japan is quite possibly the closest to what a 15-min city urban design catering to all socio-economic groups. It's not perfect but far better than Paris in terms of amenities and what the idea of 15-min cities promised.
In Aotearoa, it's considered "woke fantasy" by many for the obvious reasons.
If you say so JC..hopefully Cindy is now out of your head and taken up by the Woksters.
An example of it working that I visited just this year...
Barcelona is viewed by many as the ideal template for a 15-minute city. Work is already underway to improve its walkways and cycle lanes, and digital twins – digital replicas of systems and environments – are being used by to help simulate how planning and structure changes will impact the city.
Barcelona is viewed by many as the ideal template for a 15-minute city.
Sure. But Catalonians are also very pragmatic people and not driven by romanticism. Their immediate concerns have been more focused on how they can provide affordable housing for their citizens and not be sacrificed for the tourist hordes.
As for Ardern, she's probably counting her lucky stars that she was the first to be cut down from the Anglosphere's 'illiberal ruling elite.' They've been savaged mercilessly and I'm even surprised at the extent of the backlash. Never saw this coming.
Why would you rebuild there if you believe that climate change is causing all the fires? Surely you would take your insurance money and do a "managed retreat" to somewhere like Utah where climate change cannot get you? Wild fire areas should be red zoned. Time for California to put their money where their climate policy is.
Dont need to move the whole city, just the parts in the middle of forests and bushland that keep getting burnt down. However, if over time there is nobody left living there, so be it.
Christchurch red zoned over 5000 houses after the earthquake. To date, they've not been stupid enough to rebuild houses on the area. We have a cycling path there instead. One for the Greenies.
Dont need to move the whole city, just the parts in the middle of forests and bushland that keep getting burnt down
Many of these burned houses are in vanilla suburbia. It's also a small percentage of the houses in the area.
People will rebuild there, because there's still significant demand for people to live there. Somewhere like Utah, doesn't offer the same things as Southern California.
The available water supply has been a huge issue.
“This was supposed to be the water to put out the Palisades fire.” The FP’s Austyn Jeffs visits the Santa Ynez Reservoir that has reportedly been empty since February 2024.
GAVIN NEWSOM: All of our reservoirs here in southern California are full.
REPORTER: One of them was actually not full - the one that serves the Palisdes [which is on fire].
NEWSOM: That's why I asked for an investigation.
There is nowhere on the planet that won’t be affected by climate change. Obviously some places will be more affected than others, but the idea that we can somehow avoid it is ostrich thinking. We need massive investment in both GHG emission reduction (green transition) and mitigation
The first two sentences are correct. So too is the last half of the last one.
But it's not 'investment' we need; that was the mistake Jimmy Carter made (and which Catton reprimanded, back in 1980 - why are we still back there?).
It is disinvestment; doing less or nothing. Green growth is just as temporary as blue or red or yelloy growth.
It is disinvestment; doing less or nothing. Green growth is just as temporary as blue or red or yelloy growth.
The world's getting munted, because too many people are consuming too much stuff.
Doing and making more new stuff with an enviro-spin, isn't reducing the problem.
If we were super serious, we'd only manufacture items to last multiple generations, and we'd only buy a handful in a lifetime.
TLDR: we can't live like this at all.
Doesn't suprise me the Australian economy is picking up again. AUD has weakened making mineral exports more competitive. For example BHP and RIO break even at $45/t currently so prices now, $90/t, still works for them to expand into even if it's not record breaking prices they can make money by moving more volume.
Doesn't suprise me the Australian economy is picking up again. AUD has weakened making mineral exports more competitive. For example BHP and RIO break even at $45/t currently so prices now, $90/t, still works for them to expand into even if it's not record breaking prices they can make money by moving more volume.
Sorry but this doesn't make much sense to me. Buyers don't "stock up" or buy more minerals because AUDUSD has weakened. In the case of iron ore, China-side they don't want the price to weaken as iron ore is has been used a loan collateral. In fact, the use of iron ore has seen instances of fraud, where warehouse receipts for iron ore were allegedly used multiple times to secure loans from different banks.
They may not stock up but they may change suppliers. Australia's biggest competitor is Brazil, where the Real has dropped 21% against the USD compared to the 8% drop of the Australian dollar, giving Brazilian producers a cost advantage over Australian producers. Such cost advantages then get passed through to buyers as cheaper prices.
Aussie iron ore exports to China are approx 80%+ of its total iron ore exports and 61% of China's iron ore imports. The mkt is largely price driven, which is why China imports iron ore from Brazil if the price is right. Just because AUDUSD falls doesn't necessarily mean greater receipts for Forty, Rio Tinto.
FYI, Iron Ore 62% Fe, CFR China (TSI) Futures are down 29% over past 12 months.
They better keep to their target. Personally, I believe the inflation target should be zero - after all, inflation is just another form of tax.
Reminds me of Stealing Harvard, "The string is a guide John, it's just a guide"
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.